Designed by: Pragati
Produced by: Harshita Tyagi
Multibagger stocks are stocks that return several times their investment, that is, 100% higher returns or more in a relatively short time. If a stock gives you twice the returns then it is a two-bagger, thrice is called a three-bagger, so and so forth.
Multibagger stocks are often undervalued with great fundamentals and high growth potential waiting to be discovered by the investors. Investors with decent risk appetites who are looking to build capital can aim to get their hands on multibagger stocks.
Investors need to keep an eye on the company’s debt to equity ratio, revenue multiples, price-to-equity ratios while identifying multibagger stocks. Also, cheap valuation may not necessarily be a bad thing. If a stock is undervalued, and it has good fundamentals, the valuation could be revised in the future, and the investors may end up benefiting from it.
Investors must pick a multibagger in an industry that is looking to grow substantially in the next five to ten years. If the industry is showing signs of having topped out growth-wise, it may be difficult to pick a multibagger in that industry. Always, look for a company with a competitive advantage. Also, keep a close watch on a company's management, business model.
Some of the factors that pave the way for a stock in being a multi-bagger would be companies that have low debts, better P/E, undervalued stock price, strong revenue stream, high-performing industry, and competitive advantage over their peers. Take a look at some multibagger stocks in 2023.
Hardwyn India share price has surged over 130% in the last 1 year, doubling investors' money in that time. The stock has jumped more than 300% in 5 years. This multibagger turned around 50x in less than three years. Company's Debt to Equity Ratio of 0.4 is less than 1 and healthy, implying that its assets are financed mainly through equity.
Vardhman Special Steels share price has surged over 70% in the last 1 year. This multibagger stock has jumped more than 200% in 5 years. Company's Return on Equity(ROE) for the last financial year was 15.6%, in the normal range of 10% to 20%, as per Trendlyne data.
Medico Remedies share price has soared over 250% in the last one year. The multibagger stock has rallied 200% in the last 5 years. Its Return on Equity(ROE) for the last financial year was 16.5%, in the normal range of 10% to 20%, according to Trendlyne.
De Nora India share price has rallied over 100% in the last one year. The multibagger stock has logged a 300% gain in the last 5 years. The company is debt-free, and its Return on Equity(ROE) for the last financial year was 19.9%, in the normal range of 10% to 20%, according to Trendlyne.
Titagarh Wagons share price has soared more than 200% in the last 1 year. This multibagger stock has nearly doubled long-term investors' money in the last 6 months. Company's Debt to Equity Ratio is higher than 1, implying that its assets are financed through debt, Trendlyne data shows.
Recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of Business Today. Investors should consult their financial advisors before taking any position.